Reliance Jio Infocomm Ltd is looking to raise around $1.6 billion to fund the purchase of equipment from Nokia Oyj. The discussions involve several prominent banks, including Citigroup Inc, HSBC Holdings Plc, and JPMorgan Chase & Co, according to a report by Bloomberg.
The loan will likely be priced over the Secured Overnight Financing Rate, a benchmark interest rate. It will have a maturity period of as much as 15 years. The loan structure and terms aim to provide favourable conditions for Jio as it aims to procure the necessary equipment for its operations.
The banks are exploring the possibility of providing a loan to the Reliance Company as the deal hasn’t been finalized.
Finnvera, a Finland-based export credit agency will issue guarantees covering the majority of the loan, according to the Bloomberg report.
Last October, Nokia announced that it had reached an agreement to supply Jio with equipment for its 5G rollout in India. After investing billions of dollars to acquire the airwaves, Reliance was first out of the starting blocks to offer 5G services in India.
The strategic move by Reliance reflects its commitment to expanding and strengthening its telecommunications infrastructure. The company aims to boost its capabilities and maintain its competitive position in the industry.
According to the report, Jio has raised $3 billion from 55 banks and an additional credit of $2 billion from 18 banks. The funds will be used to allocate the funds towards financing its nationwide rollout of a 5G network.